Ong Jang Chuan v. Wise & Co.

33 Phil. 339 (1916)

Area of Sales Law Covered: A valid subject matter must be determinate or at least
determinable

SALIENT FACTS:
1. A contract between Ong Jang Chuan and Wise & Co. was executed.
2. The contract reads: “We, Wise & Co. (Ltd.), have sold to Mr. Ong Jang Chuan the
following goods on this 29th day of July, 1914: One thousand (1,000) sacks of flour,
‘Mano’ brand, at the net price of P11.05… per barrel, the expenses of
transportation from the Binondo Canal to be borne by the purchaser, 500 sacks to
be delivered in September and 500 in October, which we bind ourselves to
deliver…”
3. Wise & Co. was not able to deliver the goods.
4. Defending themselves, Wise & Co. argues that the ‘Mano’ brand of flour which
they would deliver had to come from Australia, and at the time the contract was
executed, Wise & Co. did not have sufficient stock of the said brand of flour.
5. Wise & Co. added that the government of Australia prohibited the exportation of
flour due to the ongoing war between Great Britain and the German Empire.
6. Wise & Co. contends that the non-delivery was due to a fortuitous event.

ISSUE: Was there a perfected sale primarily considering the subject matter?

SUPREME COURT HELD:

Resolution of the ISSUE: The sale was not a perfected one.

Law Applicable to the ISSUE and FACTS: Article 1409 paragraph 6 of the Civil
Code provides that contracts where the intention of the parties relative to the principal
object of the contract cannot be ascertained are inexistent or void from the beginning.
The essence of the said provision has been echoed by the holding in the case of Yu
Tek & Co. v. Gonzales wherein the Supreme Court explained that “there is a perfected
sale with regard to the ‘thing’ whenever the article of sale has been physically
segregated from all other articles”.

Application of the Law to the FACTS: There was no appropriation of any

particular lot of flour, and it was not “physically segregated from all other articles”.
Since there was no “physical segregation from all other articles”, the subject matter
was not determinate or at least “determinable”. Hence, there was no perfected sale.
 Doctrine of the Case: When the minds of the parties have met upon a subject
matter which is neither determinate nor determinable, the resulting contract would be
void.

CRITIQUE/ANALYSIS:
I agree with the concurring opinion of Justice Moreland that although the decision
was correct in stating that a sale (not a contract of sale) is not perfected unless the
subject-matter of the said sale “has been physically segregated from all other articles”,
this was not even remotely related to the point of contention of the parties. The legality
and the validity of the contract are already admitted. No one was even challenging if
there was a breach of contract. The only issue being raised by the parties is if the non-
delivery of the contract was excused.
However, I don’t agree with Justice Moreland when he stated that there is
nowhere in the Civil Code a requirement that, in order that a contract, of whatever
kind, shall be perfect, that is, binding on the parties, the subject-matter thereof must
be segregated or set apart by itself, or be “capable of being physically designated and
distinguished from all others of the same class” and that “There is no such requirement
even with respect to a contract of sale”. I don’t agree because if there is no
determinability or at the very least a formula which the parties agreed on and the courts
can use to establish the subject matter to the point that the courts would need to ask
the parties to confirm what their agreed upon subject matter is would defeat the
principle of mutuality and obligatory force required in all valid contracts including a
contract of sale.

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